Talks under way for CAL/Air Jamaica to reclaim London
Published:Wednesday | February 1, 2012 | 12:00 AM
Executives of Caribbean Airlines Limited, which operates Air Jamaica, are currently meeting in the United Kingdom to discuss re-entering that market amid the retreat of rival airlines.
"The executive team has planned a visit to London and will share final details on return in early February," said the airline via email from publicist Odette Dixon to Wednesday Business. The airline has not disclosed the parties to the discussion.
Air Jamaica planned to re-enter the United Kingdom in 2012 or 2013 taking up the slack to be created by the withdrawal of Virgin Atlantic from Kingston.
Virgin Atlantic will exit the London to Kingston route in April 2012, timed months before the London 2012 Olympic Games, but will continue flying out of that gateway to Montego Bay. British Airways also operates flights into Jamaica from the UK.
Air Jamaica views the UK as an important step in achieving medium-term viability. However, flying to the UK would cost millions of pounds based on aircraft leases and landing slot costs.
The Air Jamaica Heathrow slots were sold to Virgin Atlantic in 2007 for a reported US$10.2 million.
At the time of the sale, the then management of Air Jamaica said it was forced to sell the routes as a result of the continuing heavy losses that could not be sustained. The airline lost US$27 million on the route in 2006, exclusive of apportionment of overhead costs.
The UK meeting comes on the heels of Air Jamaica's exit from the Miami, USA route which it resumed just in the final quarter of 2011. The airline returned to the busy airport almost three years after cutting the route.
In early December, Caribbean Airlines aggressively tried to woo passengers with introductory rates as low as US$79 one way plus taxes, but its passenger load factor hovered under 30 per cent, according to one of the major travel agencies.
The airline in recent times dropped routes to Atlanta, Los Angeles, Chicago and Baltimore from its route in the past. The only US cities now served by the airline are Orlando, Fort Lauderdale, New York and Philadelphia.
Air Jamaica recorded a 40 per cent drop in revenues to US$154 million (J$13.2 billion) in 2010 while operating with less passenger seats filled than year earlier levels, according to the Economic and Social Survey published by the Planning Institute of Jamaica. Expenses were not disclosed, however it was the third consecutive year of revenue declines for the airline.